from:
SAM STERNBERG
samsam@vm1.yorku.ca
subject:
          BUSINESS FUNDING FOR FREE-NETS

Free-Nets, especially at their start up, will probably have most
of their financial and material contributions coming from
institutions and businesses. This brief paper provides an
overview of the potential and the techniques involved in seeking
support from businesses. This material is targeted to freenets in
large urban areas which are trying to work with commercial
businesses in building support. Smaller nets will need to work
harder but they can apply most of these ideas.

I will cover four topics.
                          WHY BUSINESSES GIVE SUPPORT?
                          WHAT TYPE OF SUPPORT IS AVAILABLE?
                          SPECIAL ASPECTS OF FUNDING FREE-NETS
                          ADMINISTRATIVE ISSUES


    WHY BUSINESSES GIVE SUPPORT?

When planning a corporate funding campaign, there is one basic
fact that must be recognized.

           THEY DON'T HAVE TO GIVE

Companies have no legal obligation to support non profit
activities. Every contribution represents money that would
otherwise have gone to pay taxes, to pay shareholders, or to
reinvestment in future growth.  Charitable support is generally
seen as an "investment".

           WHAT'S IN IT FOR THEM?

Corporate gifts are rarely altruistic. Companies are looking for
a primary benefit to their community of customers, employees, and
shareholders, and only secondarily to the society at large.

Given this very business-like attitude its easy to understand
that the following are the main reasons companies give. I list
them here in the order they are most often mentioned, not in the
order that matters most to freenets seeking support.

     THE BOTTOM LINE ON SUPPORT

A: SUPPORTING SERVICES THAT BENEFIT EMPLOYEES AND THEIR FAMILIES.
    This is the reason for support of childcare and alcoholism
services, and it partially motivates united way contributions.

Freenets serve employees and families by improving their access
to community services [like the availability of womens' shelters]
or emergency child care services, community information of all
types, and to direct personal help in the form of moderated
information services. Our services also benefit many of the
organizations that employees and their families may turn to.

B: SUPPORTING SERVICES THAT EDUCATE EMPLOYEES & RAISE THEIR SKILL
     LEVELS.
    While this is usually the motivation for supporting higher
education; Freenets can point out two related benefits.

First, that we are teaching our members a set of computer related
skills that are of growing importance to business. Freenet
members are learning RESEARCH SKILLS, ONLINE COMMUNICATION
SKILLS, AND IMPROVING THEIR KNOWLEDGE Of A WIDE VARIETY OF
INFORMATION RESOURCES, SOME OF WHICH ARE VERY USEFUL TO BUSINESS.

Second, freenets are SIMPLIFYING ACCESS to information that can
be of direct benefit to business. We are after all simplifying
ACCESS TO LIBRARY CATALOGUES FULL OF BUSINESS INFORMATION. Along
with a host of government data of interest to businesses. This
potential can include licensing information, tax data, regulatory
and legislative information, even general business law materials.


C: PROVIDING PUBLIC RECOGNITION AND PRESTIGE TO THE COMPANY
     Most gifts to cultural institutions and the arts are
justified this way.

Freenets have a special advantage here. Any business support can
be acknowledged on line and in the case of support for phone
lines, over and over again. Contributing to the success of a
major community service does contribute to the good will of the
general community towards specific businesses. And freenet are
very much cultural institutions - of a very new kind.

D: IMPROVING THE MARKET FOR A COMPANY'S PRODUCTS
     This is the main motivation for corporate support for
special events and sporting activities. Its no accident the beer
and cigarette companies love to sponsor outdoor summer events.

In the early stages of fundraising - this may be the single most
important reason that can presented to firms in asking for their
support. The case for the value to them must be made in a very
professional way. The fundraisers first task is to understand
just what your free-net has to offer your business community in
the way of a marketing opportunity.

Freenets offer access to 3 distinct market segments.

POTENTIAL FIRST TIME BUYERS - people who access the freenet from
libraries and other public sites.

CURRENT COMPUTER OWNERS WHO WILL BE UPGRADING - almost every
current owner will be upgrading.

DECISION MAKERS WHO WILL INFLUENCE THE PURCHASES OF THEIR FIRM -
In the early stage of fundraising, you should focus on this last
catagory; when going after your major equipment needs.

Freenets seeking donations of equipment are in a very strong
position to offer a real marketing opportunity to potential
donors. This is true automaticly. Our members will include a
large number of people who will be purchasing systems for
businesses in the future. We will also attract business staff
responsible for wide area communications within larger companies.
Systems equipment that works well for free-nets are the best
possible advertisement the competitive computer company can find.

Reaching the freenet membership is far more effective -COST
EFFECTIVE - than a $50,000 .oo newspaper add. And it works year
in and year out.

Once the first company donates to you; you can tell the next
company you are going to about the brilliant marketing decision
company #1 just made.

E: SUPPORTING THE PERSONAL INTERESTS OF SENIOR MANAGEMENT
     Private companies tend to have their contributions and even
advertising budgets under the control of owners or very senior
management. The vast majority of gifts to "high culture" are made
at the request of senior management.

Its our very good fortune that many of these people are
technically aware. Many are interested in promoting a technically
sophisticated Canada. When approaching private companies, we
should always be emphasising the personal vision of management in
regard to Canada as a technologically advanced society. Its
generally true that a request for support by a V.P. for Technical
Services has a very high probability of being met, unless the
company's financial straight are desperately bad.

F: SUPPORTING GROUPS IN WHICH EMPLOYEES ARE INVOLVED
     The vast majority of businesses do not have either staffing
or a formal process to control contributions. Instead they let
the interests of their employees govern most of their
contributions.

We are all in the business of recruiting volunteers. Efforts to
recruit volunteers from the business community will rarely be
wasted. Some Larger companies actually match employee
contributions with a similar gift. The most straightforward way
of getting business volunteers, is to make presentations to
business related associations. Of particular value are
presentation before the many associations of computer
professionals. It is occasionally possible to be adopted as a
project by one or more of these associations and computer clubs.
A poll of your supporters will usually lead directly to several
such groups with whom they are affiliated.

G: RESPONDING TO PEER PRESSURE
     Many companies don't know who is "real" or worthwhile. Its
reassuring to the management to be told that the big guys have
checked you out and decided to support you.

Once a local corporate leader has contributed, its much easier to
get others to give. If the company officers will make even casual
calls to their peers on your behalf, your prospects are all the
better.

H: CORPORATE CITIZENSHIP - MAINTAINING GOOD COMMUNITY RELATIONS
     This is the least effective direct appeal but it figures in
most decisions. So don't forget that you really are creating or
running a major new community service.

Since most freenets are not only available from home and office
computers, but also from assorted public sites; its invaluable to
know how many patrons your affiliated libraries and agencies are
seeing each year. This number should be prominently displayed in
your materials and mentioned at fundraising meetings. It creates
"goodwill" for companies when they are seen as directly
benefiting the community by supporting the freenet movement.
Free-nets provide an excellent opportunity to be seen doing good.

Of course these same numbers are also worth mentioning to
companies that service first time buyers when looking for their
support. Training firms, computer insurers, small system sellers,
etc., should all be approached to cover phone line costs. And
they should all be reminded of the number of potential new
customers who can see them mentioned when connecting to your
free-net.

A NOTE ON CORPORATE RESPONSIBILITY AND IRRESPONSIBILITY
     Lest this seem to be offering a white wash of the many
problems created or contributed to by bad business practices; I
have no interest in seeing free-net sell their soul to business.
I expect part of every dollar raised to go toward providing
better public access to data about polluters, fraudulent schemes,
self interested legislative efforts, etc. I just don't believe
business is all bad or all good. As a community information
resource we have a responsibility to display all the faces of
business.

     The flip side of all of this is something know in the
corporate world as CAUSE RELATED MARKETING. This now represents
about 15% of most larger companies contributions budget. Business
publications have bluntly described its purposes as "enhancing
corporate image, thwarting criticism, pacifying customers and
easing market entry."  Every freenet's directors while have to
deal with the ethical dilemmas involved. My personal view is that
we have an obligation to ask for this money and see that it is
used to create a fully informed public. But, we have to avoid
being abused by the worst of these offers. An example of abuse by
a cause related marketing scheme is this gem.  In 1987, just
prior to thanksgiving, American Express spent $50,000.00 on an ad
offering to donate 10 cents to New York MEALS ON WHEELS for every
meal ordered with their card over the holiday. New Yorkers would
have had to order half a million meals just to match the ad
budget.



            WHAT TYPES OF SUPPORT ARE AVAILABLE?



A: CASH

B: SERVICES - LEGAL - ACCOUNTING - MARKETING
Most major firms donate some services. Law firms are often
required to do so.

C: EQUIPMENT - GIFTS & LOANS
     If you can't get equipment donated - try getting it loaned.
     If local resources are poor try getting a preferential
price.
     Freenets by their nature are not on the cutting edge of
computer technology. Your success rate will be highest if you
know the product lines and consistently ask for last years
models. That help remove dead inventory and convert it real
advertising and goodwill development.

D: ADVERTISING
     Ask companies to work you into their print adds and handout
materials.

E: CONTACTS WITH OTHER COMPANIES
     As mentioned previously no one has better connections in the
business community than an active business person.

F: FURNITURE
     Most medium and large firms have a storage area for
currently unused stuff. Ask around - why spend money on
furnishings.

G: SPACE
     Investigate the possibility of space with the companies
having the largest involvement in your freenet. They can be
approached with space requests for meetings and special events,
even for offices.

H: STAFF & VOLUNTEERS
     Many larger companies support their employees voluntarism
and may be able to help you do internal recruiting. Phone
companies, banks, major retailers, and major industries are good
places to ask about this. A few companies have even assigned
staff to work with non profits on a part time basis.

I: MATCHING EMPLOYEE CONTRIBUTIONS

J: COMPANY MEMBERSHIPS IN "FRIENDS OF FREE-NET"


                SPECIAL ASPECTS OF FUNDING FREE-NETS

SHARING THE EXCITEMENT
     Freenets are an exciting concept. Most health care and
international aid organizations appeal to people's pity. We are
in the wonderful position of appealing to people's optimism. Make
sure that those representing you are visibly enthusiastic.
Enthusiasm is infectious. Choose well spoken and well informed
representatives. Make sure that they understand business
conventions and dress.

DIRECTLY SUPPORTING THE NEEDS OF THE BUSINESS
     Every freenet will have a somewhat different policy on
business relations and commercial activities on the net. The more
you can demonstrate that your free-net meets the needs of the
business community, the easier it is to fundraise. I have written
a paper describing what I believe are the major advantages
businesses may get from the existence of freenets in their area.
Its written for business people who are not telecommunications
literate. If you would like a copy; contact me at:
     samsam@vm1.yorku.ca
     Sam Sternberg
     Toronto Free-net Committee
[ ASK FOR THE BUS.DOC - ITS NOT A TORONTO FREE-NET
DOCUMENT - AND IT ABSOLUTELY DOESN'T REPRESENT BOARD POLICY -ITS
A PERSONAL PERSPECTIVE ]

Fell free to modify it in keeping with your policies and use it
as piece for distribution. Businesses, that understand the direct
benefits they will get from operating freenets, will have a much
higher propensity to support your efforts.


EVERY COMPANY HAS COMPUTER ENTHUSIASTS WORKING FOR THEM
     Free-Nets are in an enviable position when it comes to
corporate funding. Every company of any  Never tell staff that your
prepared to go over their heads
if they don't co-operate. Or threaten the company with negative
publicity. That kind of reaction is just infantile.

When fundraising, you will be asked if company "x" has
contributed. Be absolutely honest. If you asked but didn't get
anything say so. And mention that you hope to improve your level
of volunteers from the company and ask again next year. Never
disparage a potential donor. The person your talking to may just
know and like people in the firm under discussion.


E: BE REASONABLE
     Accept refusal graciously.
     If your analysis of a company's motivation to support you
show that you aren't a primary candidate for them; start small
and build their involvement. Perhaps starting by making a request
for an IN-KIND gift. Or assistance in recruiting employee
volunteers.

F: BE PREPARED
     Have a financial statement or business plan
     Have proof of your not for profit status
     Provide a list of Board of Directors and their background
     List all your current donors and supporting Institutions
     Produce an annual report or progress reports.

G: ACKNOWLEDGE EVERY CONTACT IN WRITING.
     Its important to thank every company you made a request to,
especially when they REFUSE YOUR REQUEST. Nothing does more to
improve your chances on a second request than someone remembering
the Free-Net as that very professional group which said thanks
for taking the time and we understand the demands on you funds
didn't permit a gift this time around.

H: FUNDRAISING WILL BE A PERMANENT ACTIVITY OF THE FREE-NET
     Do it right. Right from the start. Corporate funding can be
especially rewarding because companies often make gifts year
after year. No other source, except your members, can be so
reliable.